Franchising Code of Conduct - Australian Government

Description

You are required to comply with the code if you are party to a franchise agreement.

A franchise agreement is an agreement in which a person (the franchisor) grants to another (the franchisee) the right to carry on the business of offering, supplying or distributing goods or services under a particular system or marketing plan which is substantially determined, controlled or suggested by the franchisor and is associated with a trade mark, advertising or commercial symbol.

The code has numerous requirements, including:

  • an obligation to act in good faith in dealings with one another (for example, honestly and with an intention to engage in fair dealing)
  • to provide prospective franchisees with a generic information sheet outlining the risks and rewards of franchising
  • to provide prospective franchisees with a disclosure document detailing key information about the franchise system and the running of the franchise
  • to provide greater transparency in the use of and accounting for money used for marketing and advertising and to set up a separate fund for marketing and advertising fees
  • additional disclosure about the ability of the franchisor and a franchisee to sell online
  • a prohibition on franchisors from imposing significant capital expenditure except in limited circumstances
  • to provide reasonable written notice of proposed termination of the franchise agreement.

The code also implements financial penalties and infringement notices for serious breaches of the code.

Please consult the Contact Officer for more information and to ascertain the level of compliance that may be required.

Service type

Code of Practice

A code of practice can be either a legal requirement or non-legal requirement. Legal codes of practice are defined as a result of legislation. Non-legal codes of practice are defined by industry regulators and bodies.

Act(s) name

Competition and Consumer Act 2010 AG

Regulation(s) name

Trade Practices (Industry Codes - Franchising) Regulations 2014 AG

Administering agency

Australian Competition and Consumer Commission

Enforcement and Compliance Executive

Contact details

Contact Email, Phone and Address Details for this service in simple two column table format, header then data.

Enquiries

Enforcement and Compliance Executive

Australian Competition and Consumer Commission

Operating address: 23 Marcus Clarke Street
Canberra
Australian Capital Territory 2601
Mailing address: GPO BOX 3131
Canberra, Australian Capital Territory 2601
Phone: 02 6243 1111
Phone: 1300 302 502
Fax: 02 6243 1199